03
Dec

Whether you’re smart about money or you have some bad habits when it comes to saving or spending, it’s never too early to teach your children the value of a dollar. Money management is one of the most important things a child should learn before she becomes an independent adult, yet it’s not taught in schools. As the parent, it’s up to you to educate your child about how to handle money.

Credit card for under 18
Here are 4 tips for showing your child how to use money responsibly:
1- Use cash: Although many of us don’t use cash much anymore, because of the convenience of debit and credit cards, if you’re heading to the store with your child, bring along some cash. A credit card is an abstract concept for a child; in order to appreciate the fact that you’re spending money, she has to see that the money leaves your hands, unlike a debit or credit card that gets swiped and then returned. Also, if the child is old enough to understand numbers and the concepts of “more than/less than”, she needs to see that you’re leaving the store with less money than you had coming in.

2- Give an allowance: When your child is old enough, give her a small allowance each week. Even if it’s just 25 or 50 cents, it’s a way for her to begin to learn to save money, and to understand what it’s worth. If you want, tie the allowance to a simple, age-appropriate chore—making her bed in the morning, or perhaps washing the dinner dishes. If she completes her chore for the week, she receives her allowance. This shows your child that in order to earn money, you have to work for it. Explain that if she saves her money, she will eventually have enough to purchase something she wants.

3- Help your child set a savings goal: Has your child been eyeing a special toy or book? Set up a plan for her to purchase it herself with money she’s saved. Be sure it’s something reachable—if it’s something she won’t be able to buy for months or years, redirect her focus to something that costs just a few dollars so she can realistically buy it within weeks. Let her store, count, and manage whatever money she accumulates from allowance, gifts, or elsewhere, and then make a special trip to the store and let her make the purchase on her own.

4- Let your child see you make choices: Generations ago, money was not discussed with children or outside the family. Times have changed. As you make decisions in your day-to-day life about how you spend your hard-earned dollars, let your child in on that decision-making process. Explain that you work hard for your money and that it’s important not to waste it. Show her the difference between what you want and what you need. You can explain to her that you need to buy food for the week, but if there’s money left, perhaps you could spend it on something you want, but the needs must come first. Even in the supermarket, show her that, if you’re on a budget, you’re going to buy something healthy and essential like fruit and vegetables, and only if you have money leftover will you buy a “fun food” like cookies.

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